Obama Administration Says Legislation Would Provide “Firm Legal Foundation”
March 17, 2011 — Current industry self-regulation on digital tracking and marketing practices may not be enough to stave off legislation establishing a mandatory Do Not Track program, according to testimony and remarks made at a Senate Commerce, Science & Transportation Committee hearing held March 16 to discuss the state of online consumer privacy.
Although Committee Chairman John D. (Jay) Rockefeller IV (D-W.Va.) acknowledged in a statement that some members of industry have taken steps to address consumer privacy, he contended that voluntary programs are not yet sufficient to protect consumers.
“For too long, Congress has been asked to let self-regulation work. We’ve waited. And waited,” Rockefeller said. “And while we’ve waited, Americans have grown exposed. Self-regulation, by and large, has been a failed experiment.”
Significantly, Lawrence E. Strickling, assistant secretary for Communications and Information, National Telecommunications and Information Administration, U.S. Department of Commerce, told the Commerce Committee that the Obama Administration supports legislation in this area. “I can report today that the [Obama] Administration now recommends that Congress enact legislation to provide a firm legal foundation” to support online consumer privacy protection, Strickling said.
Coalition, 4A’s Support Digital Advertising Alliance
Despite these calls for new laws, the Coalition for Healthcare Communication continues to strongly support industry self-regulation, as a way to both honor consumer preference as well as avoid broad legislation. “Yesterday’s Senate hearings highlight every citizen’s interest in privacy, especially the need for digital health marketers to respect the choice of their customers,” said Coalition Executive Director John Kamp.
“That’s why the Coalition and the 4A’s have forged ahead with major industry partners to build a system where Web users know when they are being tracked and are allowed to opt out. Indeed, industry self-regulation is well ahead of the FTC and other government regulation efforts,” Kamp noted. “We must be wary of the FTC’s favorite Do Not Track program. While it’s popular in the telemarketing context, digital is different and the current proposal looks more like a sledge hammer than measured regulation.”
The 4A’s and the Digital Advertising Alliance issued the following statement in response to the Senate hearing:
“We strongly believe in protecting consumer privacy. It is not only the right thing to do, but it is good for business. Consumers should absolutely have a choice about whether they want to be tracked online. Efforts of the government are to be applauded, without a doubt, but online privacy and a robust, relevant online experience need not be mutually exclusive.
The interactive industry strongly supports consumer privacy and meaningful choice and is building the strongest self-regulatory program possible (http://www.aboutads.info) – one that empowers consumers to exercise control over their information online. This effort has been spearheaded by the American Association of Advertising Agencies, the Association of National Advertisers, the Interactive Advertising Bureau, and the Direct Marketing Association, and also includes the American Advertising Federation, the Network Advertising Initiative, and other leading industry associations that collectively represent all of the key elements of the Internet ecosystem.
We believe that this approach is meeting consumers’ privacy expectations today and will be equipped to evolve to continue to do so in the future. We will continue to work with all policymakers on these important issues.”
Industry Wants More Time, Not Legislation
Speaking on behalf of industry at the Senate hearing, John Montgomery, COO, North America, for GroupM Interaction, said that the Digital Advertising Alliance has indeed made progress, citing among other milestones a consumer education “Privacy Matters” campaign, the development of an Advertising Option Icon, the launch of the AboutAds.info Web site and consumer-facing opt-out page, and enforcement programs under the Direct Marketing Association and the Council of Better Business Bureaus.
Montgomery also stated that a self-regulation program will help consumer privacy protections evolve, because it can adjust to market circumstances in a flexible, efficient manner outside of the legislative process. “One of the benefits of industry self-regulation is its ability to respond quickly to changes to technology and business practices,” he said.
For example, one of the hypothetical concerns being raised regarding information collected via behavioral advertising is that the data could be used at some point for employment, credit or healthcare eligibility. Although this is not current business practice, the self-regulatory program already is addressing those concerns “to clarify that this practice will never occur,” he added.
Further, Montgomery advised the Senate panel that it is important to avoid sending consumers a “mixed message” that could inhibit them from acting because it adds confusion to an already complex arena. “We have to ensure that there is a single standard,” he concluded. “Self-regulation creates the right framework for innovation and privacy.”
Commerce, FTC Weigh In
However, government speakers and several Senators pushed hard for both legislation and regulation. Strickling told the Senate panel that the Commerce Department has concluded, following consideration of comments received on its green paper, entitled Commercial Data Privacy and Innovation in the Internet Economy: A Dynamic Policy Framework, that legislation – establishing a “consumer bill of rights” – should be enacted to support consumer privacy. Strickling said the Commerce Department is hoping to issue its final report on online consumer privacy this spring.
Federal Trade Commission (FTC) Chairman Jon Leibowitz stated that he is “agnostic” about whether industry adopts a robust, enforceable self-regulation mechanism or whether Congress acts to protect consumers through legislation, but he also stated that Do Not Track should not just be an “empty slogan.”
“I hope American businesses will step up their efforts,” Leibowitz told the Committee. He cited the work done to date by the Digital Advertising Alliance to develop “Self-regulatory Principles for Online Behavioral Advertising” as “promising,” but also added in his written testimony that these efforts “are still in the embryonic stage, and their effectiveness remains to be seen.”
Representing the American Civil Liberties Union, Legislative Counsel Chris Calabrese told the Committee that the ACLU rejects any approach that relies solely on self-regulation and fully
supports legislation. “Companies’ promises are important, but not enough,” he said.
At the conclusion of hearing, Sen. John Kerry (D-Mass.) stated that the Committee “would continue a thoughtful process” on the matter. Kerry indicated that he is currently working on a bill to establish a “commercial privacy bill of rights.”levitra cheapest